Theranos CEO reportedly trying to start new company: 5 things to know

The Wall Street Journal's John Carreyrou, who has followed the story of Theranos and its founder and CEO Elizabeth Holmes, spoke withVanity Fair June 8 about the company's downfall and Ms. Holmes' ambitions to start a new venture.

Theranos, which launched in 2003, promised to revolutionize blood testing by using one drop of an individual's blood to test for a variety of diseases at a lower cost. However, the firm was subject to regulatory and quality control investigations after Mr. Carreyrou published an investigation in The Wall Street Journal in 2015 alleging Theranos' devices were flawed and inaccurate.

After the investigations, Theranos and Ms. Holmes were charged with fraud, according to a March filing with the U.S. Securities and Exchange Commission. Ms. Holmes settled the fraud charges the same month and was forced to lay off roughly 80 percent of the company's workforce in April to avoid bankruptcy. Ms. Holmes is also facing a criminal investigation.

1. According to Mr. Carreyrou, nearly every word Ms. Holmes said about her company was either embellished or outright deceptive, including fabrications about the company's profitability and its capabilities. For example, she told investors in 2014 Theranos was on track to make $100 million when it was really only expected to make $100,000. Ms. Holmes also routinely told the press her blood-testing machine was capable of making over 1,000 tests, when in reality it was only capable of making a single type of test, Vanity Fair reports.

"At the end of my book, I say that a sociopath is described as someone with no conscience. I think she absolutely has sociopathic tendencies. One of those tendencies is pathological lying. I believe this is a woman who started telling small lies soon after she dropped out of Stanford, when she founded her company, and the lies became bigger and bigger," he said. "I think she's someone that got used to telling lies so often, and the lies got so much bigger, that eventually the line between the lies and reality blurred for her."

3. Mr. Carreyrou also said he's spoken with numerous former Theranos employees and has found Ms. Holmes "has shown zero sign of feeling bad, or expressing sorrow, or admitting wrongdoing, or saying sorry to the patients whose lives she endangered," according to the report.

"One person in particular, who left the company recently, says that [Ms. Holmes] has a deeply ingrained sense of martyrdom. She sees herself as sort of a Joan of Arc who is being persecuted," Mr. Carreyrou said.

4. However, Mr. Bolton writes the most astonishing fact he learned from the conversation was that Ms. Holmes, according to Mr. Carreyrou, is currently attempting to procure investors for a second startup idea.

"According to [Mr.] Carreyrou, [Ms.] Holmes is currently waltzing around Silicon Valley, meeting with investors, hoping to raise money for an entirely new startup idea. … Given that, I'm sure she will somehow succeed in convincing someone to hand over millions of dollars, especially if venture capitalists like Tim Draper [an early Theranos investor] are still out there saying the stories by [Mr.] Carreyrou were wrong ... and that [Ms.] Holmes was on the precipice of saving the world ... before the media came after her," Mr. Bolton writes.

5. As part of her settlement with the SEC, Ms. Holmes is not required to admit wrongdoing. However, she was made to surrender voting control at Theranos and is banned from serving as a director or officer at any public company for 10 years. She must also return 18.9 million shares of stock and pay a $500,000 penalty, according to the report.

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